Rhode Island Home Buyers Tips for Avoiding Mistakes
From Mike Auger CMI, a Rhode Island Home Inspector
Hire Your Own Buyers Agent
Many buyers, especially first timers skip this step. You must hire your agent prior to making an offer or really discussing the purchase of a home. Your own buyers agent, works for you and has a fiduciary duty to their client, that means they work in your best interest. The listing agent works for the seller, not you. Here’s the thing, a buyer agent costs you no money, hiring a buyers real estate agent is free to the buyer. Why turn down free representation!? Your buyer agent can walk you through every step of the process, helping you to find the best mortgage person, lawyer, and yes, home inspector. They work in your best interest to ensure you aren’t taken advantage of or accidentally waive rights you are fully entitled to. You definitely want an agent to represent you as a buyer. Check with friends, family, co-workers. Good personal recommendations are a great tool.
Choose The Correct Mortgage for You
There are several ways to go about borrowing money for your new home. There’s the 203K (you borrow money for purchase and repair of home all at once). If you are a veteran there are VA loans. There is also the FHA loan where you have a small down payment for first time home buyers. There are also fixed and variable rates, points purchase, different length loans…Be sure to talk to a qualified mortgage broker for these first two steps.
In Rhode Island, there can be as much as 5-6% of the home price due at closing, just be prepared. Your mortgage broker, if he’s good, will have you prepared for this in advance.
Set a Budget
Many home buyers in RI begin shopping without setting a budget. Before shopping, do your research and see what you can afford, if you cant make the mortgage payment, and you lose the house, you haven’t done yourself any favors. Also see what you are pre-qualified to borrow, no sense falling in love with a new house you can not get financing for.
Research the Community
Especially if you are new to Rhode Island or even the the area of RI, do some home work on the area. If you have children or plan to have children, check out the school district. Some areas can have large differences in taxes even though they are relatively close, also read the local paper and have a look to see what’s going on. Check the items that will impact your family lifestyle.
Know What Houses Cost
Be aware what homes in your budget generally sell for (not list for). If you don’t get this information and you like the first home you see, you could pay tens of thousands of dollars too much. A quality realtor should be able to have this information readily available for you.
Take a Drive by the Place at Night or Off-Hours
If you drive by most neighborhoods on Sunday afternoon, it may be a drastic difference from Friday night. The neighborhood may not seem a inviting and you may think twice about moving your family there.
Buy a House That Suits its Neighborhood
Refrain from buying a big home in a neighborhood full of small ones. If you buy a home for $500, 000 and all the other homes in the area are $150,000 homes, it will likely lower your property value.
I know it’s looking ahead, but if the home has odd features, it may suit you perfectly, but might make it harder for you to sell down the road. Other things like bedrooms, a three bedroom home is much easier to sell than two. Same with bathrooms, an average 4 bedroom home has 2 bathrooms, if you buy a 4 bed/1 bath, you’ll be competing against 4 bed/2 bath homes when you go to sell it. I’m not saying don’t buy a home that’s not super easy to sell, just take it into account that’s all.
Get a Quality Rhode Island Home Inspection, and Read All Of It!
Know what you are buying. The only way to know is to pay for a quality home inspection. Hire a guy who knows what he’s doing (me) and you will not regret it. Don’t skimp here, if you price out inspectors and there are a couple significantly cheaper guys, stay clear. A good inspector is trained, and has experience and equipment to do a good job, to get those items at your disposal it does cost money. You can buy a home that has defects or needs work, just buy accordingly and know up front. Sellers (especially flippers) will try to polish up the place and a quick look does look good, but a thorough inspection can yield information vital to your best decision making.
Also with today’s large amount of bank owned properties, you never get a sellers disclosure either, skipping the RI home inspection here is a bad idea.
Know What Repairs Cost
Get an idea of the cost to repair deficiencies in your prospective home. Your home inspector may or may not help with this. I will do my best to get you in the area, if I can. Don’t take the realtors word for it, get good info on your own. Its OK to get quotes from contractors. It would not be good if you thought you purchased a home that needs a new roof and you think it costs about $3000 and you find out it costs $8500. Who has an extra $5000+?